Absa prepares to respond to leaked preliminary Public Protector report

Barclays Africa may have to repay R2.25bn if findings by the Public Protector is upheld.

Picture: barclaysafrica.com

JOHANNESBURG - Barclays Africa says it plans to make submissions in a bid to correct "several factual and legal inaccuracies" in the Public Protector's preliminary report into the bank before the end of next month.

Absa may be liable to pay back more than R2 billion for an unlawful apartheid-era bailout.

Provisionally, the Public Protector Busisiwe Mkhwebane has found that government breached the Constitution and the Public Finance Management Act.

Advocate Paul Hoffman laid the complaint with then public protector Thuli Madonsela in 2010.

He says it's unfortunate that the report was leaked before the affected parties were given an opportunity to respond.

“It's really very disturbing and I’m disturbed that on Monday I’m told by the Public Protector there is no provisional report. On Friday I’m given a signed copy and her explanation now is that someone in her office has erroneously sent out the report.”

A previous investigation in 2000 by a central bank-appointed panel found that the loans were made to stabilise the banking system and Absa shareholders did not derive any undue benefit, recommending no further action be taken.

Barclays Africa said it would continue to cooperate with the Public Protector, but it believes Mkhwebane's preliminary report has "several factual and legal inaccuracies".

"In its current form it creates the incorrect view that Absa Bank Limited (Absa), a subsidiary of the Group, received undue benefits by virtue of the South African Reserve Bank (SARB) assistance to Bankorp," Barclays Africa said in a statement.

Barclays Plc is in the process of trying to reduce its stake in Barclays Africa to 20 percent from 50.01 percent as it focuses its business on other markets.

A spokesman for Barclays in London declined to comment on whether the case had any implications for the bank's plans to sell its stake in Barclays Africa.

SARB Governor Lesetja Kganyago said on Friday the central bank will also cooperate in the Public Protector's investigation.

Mkhwebane has given Absa, the SARB, the national treasury and the presidency until 28 February to make further submissions before finalising her investigation, the Mail & Guardian said, citing a copy of a preliminary report.

In her suggested remedial action, Mkhwebane proposed that South African President Jacob Zuma should consider a commission of inquiry to see whether other apartheid-era loans should be repaid by other institutions, the paper said.

Additional reporting by Reuters.

(Edited by Shimoney Regter)